Supply Chain Management Case Study

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Recommended: Theory of Inventory Management

A common system for replenishment planning used in major companies, including Electrolux, is a material requirement planning (MRP) system. Making wrong replenishment decisions leads to expensive inventories (Danilovic & Vasilievic, 2014). Because of the uncertainty in demand and supply, there exists a need for optimizing inventory control procedures. The goal of the manufacturer is to devise production and supply procedures that minimize the average holding cost and stock-out cost. With supply chain management a challenge is to control the capital cost of raw material by keeping stock levels down when at the same time providing a high service level to customers. This can be conflicting objectives and requires a material requirement planning …show more content…

The 5S name stands for the first letter of five Japanese words that roughly translate into English as Sort, Set in order, Shine, Standardize, and Sustain (Jaca, Viles, Paipa-Galeano, Santos & Mateo, 2014). The 5S principles are a tool to create a change in employees’ attitudes and engage improvement throughout the workplace. The methodology of 5S focuses on changing employees’ habits within the entire organization to achieve improvements that lead to eliminating waste. At Electrolux, the principles of 5S are taught, and as the Japanese philosophy, it extends from leaders to assembly line employees. Training of 5S principles, especially with leadership has been a key focus this year at Electrolux. It is not uncommon to see 5S signs in conference rooms and offices throughout the Electrolux facilities. Leadership is practicing 5S principles in the everyday environment throughout the global operations. 5S is a strategy for organizational development to improve efficiency, working conditions and increase learning and changes for the betterment of the organization (Jaca, Viles, Paipa-Galeano, Santos & Mateo, 2014). The 5S principles promote cooperation throughout the organization, it encourages participation at all levels with the autonomy of employees and promotes the empowerment of employees which leads to trust and loyalty to the

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